Stocks advance as Chinese banks rise
Updated: 2010-10-14 07:16
(HK Edition)
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Hong Kong stocks advanced as Chinese banks gained after data showed lending last month unexpectedly increased and as speculation grew the US Federal Reserve will take further measures to boost the economy.
Industrial & Commercial Bank of China Ltd rose 2 percent after data from the People's Bank of China showed Chinese banks extended 595.5 billion yuan ($89 billion) of new loans last month. Anhui Conch Cement Co surged 7.8 percent after the government said it plans to boost sales of construction materials in rural areas. Tencent Holdings Ltd gained 2.9 percent after OSK (Asia) Securities raised its share-price forecast by 17 percent.
The Hang Seng Index (HSI) climbed 1.5 percent to 23,457.69 at the close. Thirty-three stocks rose, while 12 dropped on the 45-member gauge, which declined as much as 0.4 percent earlier. The Hang Seng China Enterprises Index jumped 2.5 percent to 13,301.49.
"The growth in the Chinese lending data helped boost sentiment in the banks," said Derrick Tan, a sales trader at Citic Securities Hong Kong Co "The rally in Hong Kong looks sustainable even with the index above 23,000 due to prospects of further quantitative easing."
The US Federal Reserve policy makers last month were prepared to ease monetary policy "before long" and focused on purchases of Treasury securities and boosting inflation expectations as ways to add stimulus, the Fed said in minutes of the September 21 meeting, released Tuesday in Washington.
The HSI has surged 24 percent from its low this year on May 25 as economic reports from the US and China overshadowed concerns the global recovery may stall because of Europe's debt and China's measures to curb property prices.
Stocks in the gauge trade at 15 times estimated earnings compared with 11.1 times on May 25.
Bloomberg
(HK Edition 10/14/2010 page3)